White Sox restaurant, Bacardi at the Park, is paid for with millions of public funding without return on investment

Jared S. Hopkins, Tribune reporter

With the White Sox losing more than they won last season, a new restaurant across the street from U.S. Cellular Field gave fans a place where they could drink away their sorrows.

But Bacardi at the Park was not brought to the north side of 35th Street by a generous corporate sponsor or the team's marketing department.

Taxpayers covered the tab.

The Illinois Sports Facilities Authority, the government agency that built and owns The Cell, paid $3.2 million for construction of the restaurant plus just about everything inside the place, from walk-in refrigerators to bar stools, the Tribune and WGN-TV found in a joint investigation.

Another $3.7 million from the agency went for infrastructure upgrades for water and sewers at the Gate 5 plaza that made the restaurant possible.

A 2010 agreement between the Sox, who selected Gibsons Restaurant Group to run the business, and the agency shows that at the project's completion, the team was exempt from owing the agency any money. That arrangement contrasts with the management agreement for operating the stadium, which stipulates the team pay rent and make payments based on attendance.

The Illinois Sports Facilities Authority agreed with White Sox owner Jerry Reinsdorf that the agency should not share in any restaurant profits.

"We said to Jerry, 'Jerry can we have part of the profits?' and he said no," former Gov. Jim Thompson, who was the agency's board chairman when the deal was made, said in an interview. "We said, OK.'

"I've known Jerry for 52 years. He's tough. He's tough."

Robert Baade, a Lake Forest College economist who studies stadiums, said stadium authorities should steer clear of economic development, particularly a business venture without sharing any profits.

"This just seems weird to me," Baade said. "If there is not something in it for them … why are you doing it?"

The approximately 10,000-square-foot upscale restaurant is a gleaming mix of steel, glass, wood and vintage brick, with dozens of flat-screen televisions, historical photos and murals. The beer garden and private patio outside bustle on sunny game days as customers sip drinks or cut into one of Gibsons famous steaks.

The restaurant is closed for the season, but plans are for it to eventually operate year round. Fans with tickets can enter the restaurant through a concourse; it also is accessible to anyone who wants to walk through the front door.

Thompson said he views the restaurant as just another type of concession, from which the Sox receive all the revenue inside The Cell. He cites sales tax revenue from the patrons who dine at Bacardi as a way the state is being compensated.

"Here we now have a restaurant for the fans of the White Sox, and we own it and we got what we've been asking for for several years," said Thompson, who as governor signed the legislation creating the Illinois Sports Facilities Authority. "I'm satisfied. White Sox fans are satisfied."

The Sox did not make Reinsdorf available for an interview and declined to comment on its relationship with the agency, "feeling that our (management) agreement is public knowledge and that any public comment should come from ISFA."

An agency statement said "the final proposal that included no revenue for the state of Illinois was what was voted on and agreed upon by Chairman Thompson and his board."

Its current chairman, former Senate President Emil Jones, declined to comment.

Invoices show the Sox cited Illinois Sports Facilities Authority sales tax exemption when it was ordering equipment and construction materials. The restaurant itself receives a property tax exemption because it sits on land owned by the agency.

Construction for the restaurant was initially covered by the Sox, who were reimbursed by the agency. In a records request response to the Tribune, the agency said all bids related to restaurant construction and operation were handled by the White Sox.

Thompson called the partnership "a coup" because he believes the owners of Gibsons, where the city's power brokers frequently gather, are the best restaurateurs in town.

Attempts to reach Gibsons co-owners for comment were unsuccessful.

The restaurant at the Cell appears to be unusual for a major league baseball stadium. Some full-service restaurants accessible without a ticket to the game have opened in recent years without having to tap into public coffers.

At Yankee Stadium, two restaurants are accessible without entry to the ballpark, NYY Steak and Hard Rock Cafe. Both operate year round and were paid for without public assistance (unlike construction of the rest of the stadium, which the Yankees pay for mostly with tax-exempt bonds).

On Chicago's North Side, the Captain Morgan Club, owned and operated by the Cubs, was built next to Wrigley Field by the team without any public assistance. The restaurant can be accessed from the street and from inside the ballpark.

In 1988, with Reinsdorf threatening to move his team to Florida — where a stadium was built to lure a team — then-Gov. Thompson worked the floors of the General Assembly to pass the law creating the Illinois Sports Facilities Authority. The clock on the House floor was turned off in order to meet a midnight deadline.

The city and state provide an annual combined subsidy of $10 million to the agency. The bulk of its budget comes from city hotel tax revenue, which was $30 million in 2010.

Under the ballpark lease, the Sox make payments for rent and maintenance, with that sum partly based on attendance numbers. Total amounts have averaged $2.7 million since 2003, according to the agency's annual reports. The lease expires in 2029, the agency said.

When the two sides agreed to the restaurant construction, no adjustments were made to increase the revenue stream for the agency.

The 2010 agreement also stipulates the Sox keep any revenue brought in by a new 13,000-square-foot retail store currently under construction next to the Bacardi restaurant. The White Sox paid for construction of that building.

Thompson said he had to push Reinsdorf for years before agreeing to build the restaurant. Earlier plans even included a larger commercial development with apartments and stores.

A lack of retail and eating options outside the ballpark has existed since it opened in 1991.

According to a 2007 journal article co-authored by Baade that compared economic impact of the Cell and Wrigley Field on their neighborhoods, most stadiums like the Cell are designed to bring as much income inside the stadium as possible, thereby lowering an incentive for local businesses to open up outside the stadium, Baade wrote.

"Like supplying expansive concessions services, supplying adequate parking also serves to increase the revenue for the team at the expense of local businesses," the article says.

Thompson deems the restaurant a success. Because most hotel visitors are from out of state, Thompson argues that Illinois taxpayers really are not footing the bill for the restaurant.

"It's proven to be wildly popular with fans," he said. "It's become an important part of the park."